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Collaborates with Olam, PULA and Leadway Assurance, helps farmers increase resilience to climate change.
Makurdi, Nigeria – June 7, 2022: In its resolve to help smallholder farmers mitigate loss of harvests due to poor weather conditions, pest and diseases, Heifer International has announced today, payment of over N100m as insurance compensation payout from Leadway Assurance to 3, 110 smallholder rice farmers operating in Benue and Nasarawa states of Nigeria under its pay-at-harvest Area Yield Index Insurance (AYII) project being a component of Heifer’s Naija Unlock Signature Program for Nigeria.
AYII was launched in Nigeria in 2021 by Heifer International in partnership with OLAM, Leadway Assurance and PULA as a solution to mitigate climate change-induced losses among smallholder farmers and restore investors’ confidence in rice farming.
Heifer International is a global nonprofit development organization on a mission to end hunger and poverty sustainably by working with farmers and their communities to unlock opportunities within the agricultural sector for improved incomes, food security and resilience.
Speaking during the farmers insurance claim payout ceremony held in Makurdi, Benue State, Heifer’s Country Director, Rufus Idris confirmed that a total of 4,358 hectares of farmland belonging to 4,354 smallholder rice farmers in Benue and Nasarawa states were insured during the 2021 wet farming season under the project, among which 3,110 smallholder rice farmers suffered losses due to soil moisture stress.
The affected 3,110 smallholder rice farmers who suffered poor harvests are scheduled to receive a total sum of one hundred and eleven million, three hundred and ninety-eight thousand, eight hundred and ninety-five Naira (N 111, 398, 895), starting today, as insurance compensation claim to enable them to recover their investments and refinance their insurance premium for another farming season.
According to Ayoola Fatona, Head Agric and Micro Insurance for Leadway Assurance Limited, an implementing partner for the insurance scheme, “today marks a major milestone in the Nigerian Agriculture Insurance space. Leadway wishes to reiterate our commitment to assisting smallholder farmers in guaranteeing the food security of the nation by leveraging on this type of partnership with Heifer International”.
Idris explained that the project is carried out through a pay-at-harvest model that enables participating farmers to pay back the pre-financed premium at harvest when they sell the rice produced to Olam as the off-taker. The recovered insurance premium is then re-used to pre-finance premiums for smallholder farmers during the next farming season, hence guaranteeing farmers resilience to climate induced losses.
“This cycle continues for 3 to 5 farming seasons until the rice farmers see the value of the innovative crop insurance, adopt the new practice, and begin to attract private sector interest for the financing of their crops and farmlands. Once this is achieved, Heifer’s investment would then be used to replicate the same solution with other sets of smallholder farmers within another geographical focus area of the signature program where crop insurance adoption is still low” he said.
“With climate change and adverse weather conditions playing a crucial role in negatively impacting farmer’s productivity and earnings, there’s never been a more critical time for AYII to create a soft-landing for farmers that need protection against nature’s uncertainty,” said Chukwuma Kalu, PULA’s Commercial Manager- West Africa Anglophone. “We remain dedicated to creating innovative insurance products that de-risk farmers’ agricultural investments and keep them above the poverty line, while driving farming sustainability across Nigeria.”
Smallholder farmers in Nigeria are constantly exposed to climate change-induced shocks from unreliable weather conditions, new pests and diseases that cripple their farming businesses and discourage agribusiness financiers and investors from investing in smallholder farms.
Findings indicate that overall, climate change is projected to cost 6% – 30% of Nigeria’s GDP by 2050, translating to $100 billion – $460 billion in losses. “In September 2020, farmers in Northern Nigeria lost more than two million tons of rice, a quarter of the country's projected harvest, due to flooding.
Reji George, Olam’s Vice President for Farming Initiatives added, “Olam is excited about this collaboration with Heifer International and we will remain committed to supporting the growth of smallholder farmers that we do business with as we contribute our quota to transforming Nigeria’s agricultural sector”
ENDS
About Heifer International
Since 1944, Heifer International has worked with more than 39 million people around the world to end hunger and poverty in a sustainable way. Working with rural communities across Africa for 47 years, Heifer International supports farmers and local food producers to strengthen local economies and build secure livelihoods that provide a living income. For information, visit www.heifer.org
About PULA
Pula is an agricultural and technology company that designs and delivers innovative agricultural insurance and digital products to help smallholder farmers endure yield risks, improve their farming practices, and bolster their incomes over time.
About OLAM
Olam is a food and agribusiness organization that supplies food ingredients, feed, and fiber to thousands of customers worldwide, ranging from multinational organizations with world famous brands, to small family run businesses.
About Leadway Assurance Company
Leadway Assurance Company, also known as Leadway, is one of the largest insurance companies in Nigeria on a mission to be a service provider of choice, bringing insurance as a risk management tool to the consciousness of all, including smallholder farmers, and adding value for clients and other stakeholders in an efficient and reliable manner.
